Sunoco 2009 Annual Report Download - page 41

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• Increase reliability of Company assets and realize additional operational improvements in each of its
businesses;
• Reduce expenses;
• Efficiently manage capital spending to minimize outlays;
• 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; and
• Return cash to the Company’s shareholders primarily through the payment of cash dividends.
Sunoco has undertaken the following initiatives as part of this strategy:
In the Refining and Supply business:
• Permanently shut down all process units at the Eagle Point refinery in the fourth quarter of 2009 in
response to weak demand and increased global refining capacity. In connection therewith, the
Company shifted production from Eagle Point to its Marcus Hook and Philadelphia refineries. The
overall impact of this decision is expected to reduce the Company’s pretax expense base by
approximately $250 million per year;
• Completed the sale of the Tulsa refinery and related inventory in June 2009 and received $157
million in cash proceeds from this divestment; and
• Completed an acquisition totaling $9 million in June 2009 of a 100 million gallon-per-year
ethanol manufacturing facility in New York. The plant is expected to require approximately
$25-$30 million in additional capital and is anticipated to start up in the summer of 2010.
In the Retail Marketing business:
• Completed the sale of the retail heating oil and propane distribution business in September 2009
and received $83 million in cash proceeds from this divestment; and
• Continued to execute a Retail Portfolio Management program in 2009 designed to enhance overall
return on capital employed in the business. Under this program, Sunoco is selectively reducing its
invested capital in Company-owned or leased sites, while retaining most of the gasoline sales
volumes attributable to the divested sites. Sunoco generated $207 million of divestment proceeds
related to the sale of 261 sites during the 2007-2009 period and expects to generate an additional
$80 million of proceeds, primarily over the next two years, from divestment activities.
In the Chemicals business:
• Entered into an agreement in February 2010 to sell the polypropylene business for approximately
$350 million in cash which is expected to be completed on or about March 31, 2010; and
• Permanently shut down in March 2009 the Bayport, TX polypropylene plant.
In the Logistics business:
• Completed acquisitions totaling $50 million in the third quarter of 2009 of a crude oil pipeline
which services Gary Williams’ Wynnewood, OK refinery and a refined products terminal in
Romulus, MI;
• Completed an acquisition totaling $185 million in November 2008 of a refined products pipeline
system, refined products terminal facilities and certain other related assets located in Texas and
Louisiana; and
• Completed construction in 2009 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 at a total cost
of $94 million.
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