Sunoco 2007 Annual Report Download - page 26

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of base infrastructure spending included several projects to upgrade Sunoco’s existing asset
base. These projects include $31 million for new processing equipment, boilers and re-
instrumentation projects at the Company’s refineries and $86 million for additional
investments to upgrade Sunoco’s existing retail network and enhance its APlus®con-
venience store presence.
The 2006 capital expenditures consisted of $285 million for base infrastructure and main-
tenance, $65 million for refinery turnarounds, $118 million to complete spending to com-
ply with the Tier II low-sulfur gasoline and on-road diesel fuel requirements (see
“Environmental Matters” below), $164 million for other environmental projects and $387
million for income improvement projects. Base infrastructure spending included $28 mil-
lion for new processing equipment, boilers and reinstrumentation projects at the Compa-
ny’s refineries and $74 million for additional investments to upgrade Sunoco’s existing
retail network and enhance its APlus®convenience store presence. The income improve-
ment spending consisted of $193 million associated with the Philadelphia Project; $27 mil-
lion associated with the crude unit debottleneck project at the Toledo refinery; $89
million for growth opportunities in the Logistics business, including work on projects to
expand the Nederland terminal’s pipeline connectivity and storage capacity; and $78 mil-
lion for various other income improvement projects across the Company.
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 environ-
mental projects and $163 million for income improvement projects. Base infrastructure
spending included $17 million for new processing equipment, boilers and re-
instrumentation projects at the Company’s refineries and $78 million for additional
investments to upgrade Sunoco’s existing retail network and enhance its APlus®con-
venience store presence. The income improvement spending consisted of $27 million
associated with the Philadelphia Project, $16 million to upgrade the crude oil pipeline and
storage facilities in Texas that were acquired from ExxonMobil, $22 million to complete
the construction of the first Haverhill cokemaking facility and $98 million for various
other income improvement projects across the Company.
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) 2007 2006
Balance at beginning of year $1,287 $1,196
Increase (reduction) in market value of investments resulting from:
Net investment income 75 149
Company contributions 100 100
Plan benefit payments (147) (158)
Balance at end of year $1,315 $1,287
Management currently anticipates making up to $100 million of voluntary contributions to
its funded defined benefit plans in 2008. Management believes that the pension plans can
be funded over time without a significant impact on liquidity. Future changes in the finan-
cial markets and/or interest rates could result in additional significant increases or de-
creases to the accumulated other comprehensive loss component of shareholders’ equity
and to future pension expense and funding requirements.
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