Sunoco 2005 Annual Report Download - page 28

lion. Regarding the capital outlays for environmental projects, in 2005, Sunoco reached a
global settlement with the U.S. Environmental Protection Agency and various state and
local agencies concerning certain alleged violations at its refineries of various provisions of
the Clean Air Act. Under the Consent Decree concerning this settlement, it is anticipated
that Sunoco, among other things, will make approximately $275 million of environmental
improvement capital expenditures over an eight-year period. Sunoco expects that most of
these projects will be consistent with many of the existing or projected strategic capital
projects or emission reduction projects already planned for the next several years. All
planned capital outlay amounts set forth above are in current-year dollars and do not in-
clude any anticipated increases attributable to inflation.
The 2005 capital expenditures consisted of $260 million for base infrastructure and main-
tenance, $49 million for refinery turnarounds, $404 million to comply with the Tier II
low-sulfur gasoline and on-road diesel fuel requirements, $94 million for other environmental
projects (which includes $11 million attributable to the Philadelphia Project and $26 million
to complete the expansion of the sulfur recovery unit at the Eagle Point refinery) and $163
million for income improvement projects. Base infrastructure spending included $17 million
for new processing equipment, boilers and reinstrumentation projects at the Company’s
refineries, $78 million for additional investments to upgrade Sunoco’s existing retail network
and enhance its APlus®convenience store presence and $6 million for conversion of the
Mobil®sites acquired from ConocoPhillips to Sunoco®branded outlets. The income im-
provement spending consisted of $27 million associated with the Philadelphia Project, $16
million to upgrade the crude oil pipeline and storage facilities in Texas recently acquired
from ExxonMobil, $22 million to complete the construction of the Haverhill cokemaking
facility and $98 million for various other income improvement projects across the Company.
The 2004 capital expenditures consisted of $248 million for base infrastructure and main-
tenance, $122 million for refinery turnarounds, $208 million for spending to comply with
the Tier II low-sulfur gasoline and on-road diesel fuel requirements, $50 million for other
environmental projects and $204 million for income improvement projects. The other
environmental spending included $9 million related to the expansion of the sulfur recov-
ery unit at the Eagle Point refinery. The income improvement spending consisted of $128
million towards the construction of the Haverhill cokemaking facility, $45 million for
various growth opportunities in the Logistics business, including the acquisition of refined
product terminals in Baltimore, MD, Manassas, VA and Columbus, OH and the purchase
of an additional one-third interest in the Harbor Pipeline, as well as $31 million for various
other income improvement projects across the Company.
The 2003 capital expenditures consisted of $195 million for base infrastructure and main-
tenance, $88 million for refinery turnarounds, $23 million for spending to comply with the
Tier II low-sulfur gasoline and on-road diesel fuel requirements, $91 million for other envi-
ronmental projects and $30 million for various income improvement projects. The other
environmental spending included $50 million related to the construction of a sulfur plant
at the Marcus Hook refinery.
Pension Plan Funded Status
The following table sets forth the components of the change in market value of the invest-
ments in Sunoco’s defined benefit pension plans:
December 31
(Millions of Dollars) 2005 2004
Balance at beginning of year $1,158 $1,071
Increase (reduction) in market value of investments resulting from:
Net investment income 92 123
Company contributions 100 95
Plan benefit payments (154) (131)
Balance at end of year $1,196 $1,158
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