Sunoco 2007 Annual Report Download - page 10

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• Diversify, upgrade and grow the Company’s asset base through strategic acquisitions
and investments;
• Divest assets that do not meet the Company’s return-on-investment criteria;
• Optimize the Company’s capital structure; and
• Return cash to the Company’s shareholders through the payment of cash dividends
and the repurchase of Company common stock.
Sunoco has undertaken the following initiatives as part of this strategy:
In the Refining and Supply business:
• Completed a $525 million project in May 2007 to expand the capacity of one of the
fluid catalytic cracking units at the Philadelphia refinery by 15 thousand barrels per
day, which enables an upgrade of an additional 15-20 thousand barrels per day of re-
sidual fuel production into higher-value gasoline and distillate production and ex-
pands crude oil flexibility;
• Completed a $53 million project in July 2007 at the Toledo refinery, which expands
the facility’s crude processing capability by 10 thousand barrels per day. In 2008,
additional work is planned at this facility to expand crude processing capability by
an additional 5 thousand barrels per day; and
• Completed capital projects in 2006 totaling $755 million to comply with the Tier II
low-sulfur gasoline and on-road diesel fuel requirements.
In the Retail Marketing business:
• Continued the Retail Portfolio Management program during 2007, which selectively
reduced its invested capital in Company-owned or leased sites, while retaining most
of the gasoline sales volumes attributable to the divested sites. During the 2005-2007
period, Retail Marketing generated $162 million of divestment proceeds related to
the sale of 211 sites.
In the Chemicals business:
• Implemented certain SAP®information technology modules in 2007, a $20 million
project that enabled back-office consolidation, streamlined business processes and
provided better access to critical data; and
• Completed the $18 million purchase in December 2007 of the minority interest in
Epsilon Products Company, LLC, the joint venture which is comprised of the
750 million pounds-per-year polymer-grade propylene splitter operations at the
Company’s Marcus Hook, PA refinery and the adjacent 750 million pounds-per-year
polypropylene plant.
In the Logistics business:
• Commenced construction in 2007 of a crude oil pipeline from the Nederland terminal
to Motiva Enterprise LLC’s Port Arthur, TX refinery and three related crude oil storage
tanks, which are to be completed in 2010 at a cost of approximately $90 million;
• Completed acquisitions totaling $209 million in March 2006 and August 2005 of
three crude oil pipeline systems and related storage facilities located in Texas; and
• Issued 7.1 million limited partnership units during the 2005-2006 period generating
$270 million of net proceeds and redeemed 2.8 million limited partnership units
owned by Sunoco for $99 million, reducing Sunoco’s ownership interest in the mas-
ter limited partnership to 43 percent, which includes its 2 percent general partner-
ship interest.
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