Sunoco 2008 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 2008 Sunoco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

Sunoco also has obligations pertaining to unrecognized tax benefits and related interest and penalties
amounting to $56 million, which have been excluded from the table above as the Company does not believe it is
practicable to make reliable estimates of the periods in which payments for these obligations will be made (see
Note 4 to the Consolidated Financial Statements under Item 8). In addition, Sunoco has obligations with respect
to its defined benefit pension plans and postretirement health care plans, which have also been excluded from the
table above (see “Pension Plan Funded Status” below and Note 9 to the Consolidated Financial Statements under
Item 8).
Off-Balance Sheet Arrangements—Other than the leasing arrangements described in Note 14 to the
Consolidated Financial Statements (Item 8), the Company has not entered into any transactions, agreements or
other contractual arrangements that would result in off-balance sheet liabilities.
Capital Program
The following table sets forth Sunoco’s planned and actual capital expenditures for additions to properties,
plants and equipment as well as the Company’s acquisitions and other capital outlays (in millions of dollars):
2009 Plan 2008 2007 2006
Refining and Supply ..................................... $ 546 $ 652 $ 700 $ 712
Retail Marketing ......................................... 81 128 111 112
Chemicals ............................................. 46 49 84* 76**
Logistics ............................................... 127 330*** 120 228†
Coke .................................................. 449 312 221
†† 169†††
Consolidated capital expenditures ........................ $1,249 $1,471 $1,236 $1,297
*Includes $18 million acquisition of the minority interest in Epsilon polypropylene operations.
**Includes a $14 million purchase price adjustment to the 2001 Aristech Chemical Corporation acquisition attributable to an earn-out
payment resulting from realized margins for phenol exceeding certain agreed-upon threshold amounts.
***Includes $185 million acquisition from ExxonMobil of a refined products pipeline system and related storage facilities located in Texas
and Louisiana.
†Includes the acquisition of two separate 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 $41 million.
††Includes $39 million investment in Brazilian cokemaking operations.
†††Includes $155 million acquisition of the minority interest in the Jewell cokemaking operations.
The Company’s 2009 planned capital expenditures consist of $610 million for income improvement
projects, as well as $277 million for infrastructure spending; $139 million for turnarounds at the Company’s
refineries; $135 million for the projects at the Philadelphia and Toledo refineries under a 2005 Consent Decree,
which settled certain alleged violations under the Clean Air Act; and $88 million for other environmental
projects. The $610 million of outlays for income improvement projects consist of $70 million related to a $210
million project at the Philadelphia refinery to increase ultra-low-sulfur-diesel fuel production capability, $100
million related to growth opportunities in the Logistics business, including amounts attributable to projects to
increase crude oil storage capacity at the Partnership’s Nederland terminal and to add a crude oil pipeline which
will connect the terminal to Motiva Enterprise LLC’s Port Arthur, TX refinery, $400 million towards
construction of cokemaking facilities in Granite City, IL and Middletown, OH and $40 million for various other
income improvement projects primarily in Coke and Retail Marketing.
The Company’s 2008 capital outlays consisted of $540 million for income improvement projects, $300
million for infrastructure spending, $90 million for turnarounds at the Company’s refineries, $258 million for the
projects under the 2005 Consent Decree, $98 million for other environmental projects and $185 million for
acquisitions. The $540 million of outlays for income improvement projects consisted of $94 million related to the
project at the Philadelphia refinery to increase ultra-low-sulfur-diesel fuel production capability, $11 million for
other refinery upgrade projects, $118 million related to growth opportunities in the Logistics business, $85
million towards construction of an approximately $265 million expansion of the Haverhill, OH cokemaking
46