Sunoco 2008 Annual Report Download - page 4

In 2008, Sunoco had its best historical environmental performance in key areas such as water
exceedances, spill management, and air exceedances. In particular, Refining and Supply reduced air
exceedances by 30 percent through significant investments in emissions control technology and other plant
modifications.
Overall employee personal safety performance, however, fell below expectations despite best-ever
results for contractor safety in Refining and Supply and SunCoke’s coal mining operations. Employee
personal safety and process safety management are two areas that will receive even closer attention in 2009.
Sound financial position
Following a year characterized by significant turbulence in the financial markets, Sunoco’s financial
position at the end of 2008 remains strong. We ended the year with a net debt-to-capital ratio of 37 percent
(as defined in the covenant of our revolving credit agreement), $240 million of cash on the balance sheet
and $1.4 billion of available committed borrowing capacity, which includes approximately $200 million
available to Sunoco Logistics Partners L.P. Maintaining the Company’s financial flexibility in these
uncertain economic times will continue to be a top priority in 2009.
Outlook for 2009
The coming year promises a challenging market for petroleum and chemical products as we expect
continued economic weakness and increased global refining supply. In response, we will continue
optimizing refinery operations to capture market opportunities and expect our non-refining businesses to
continue providing a solid base of earnings and cash flow.
In Refining and Supply, we expect to complete a capital project at our Philadelphia refinery that will
improve our ability to upgrade heating oil into ultra-low sulfur diesel fuel. Sunoco Logistics Partners L.P. is
expected to benefit from a recent $185 million acquisition of pipeline and terminaling assets, as well as from
other growth projects. Coke will realize a full-year contribution from the recently expanded Haverhill
cokemaking facility and is expected to begin operations at its new facility in Granite City by the end of the
year.
In addition, we are actively pursuing opportunities to create shareholder value in all of our businesses.
We intend to complete our strategic review of the Tulsa refinery, either with a sale of the facility or its
conversion to a terminal by the end of 2009. We will continue our portfolio management program to high-
grade our mix of retail marketing outlets and improve returns on invested capital. We will evaluate the
market potential for a sale of the Chemicals business and continue to pursue growth and development
opportunities in Logistics and Coke. Finally, we are pursuing a disciplined business improvement initiative
across the Company that will result in meaningful savings on the way to a first quartile cost structure.
All of this will not be possible without the continued hard work and dedication of our employees. The
men and women of Sunoco are our strongest asset and nothing we aim to do is possible without them. I
would also like to specifically thank Jack Drosdick who elected to retire last August after capably guiding
the Company for over eight years as Chairman and CEO. A man of dignity and professionalism, he
delivered an invaluable contribution to the Company. Finally, I offer a special thanks to Andy Pew and Jack
Ratcliffe who will be leaving our Board of Directors in May. Their wisdom and dedication will be missed.
In the coming year, we are certain to face challenging markets that will require tough decisions and
disciplined attention to operational excellence. However, with Sunoco’s sound financial position, high-
quality portfolio of assets and outstanding employees, I am highly confident that we are prepared for further
success in 2009.
LYNN L. ELSENHANS
Chairman, Chief Executive
Officer and President