Sunoco 2010 Annual Report Download - page 3

To Our Shareholders:
Sunoco earned $234 million in net income attributable to Sunoco, Inc. shareholders for 2010, which is a
significant improvement from the 2009 loss of $329 million. Excluding special items, Sunoco earned income of
$215 million in 2010 versus a loss of $37 million in 2009. Our pretax profit in 2010 (excluding LIFO inventory
gains and other special items) was $307 million1compared to a pretax loss of $167 million2last year.
We achieved this result in a market environment that was not substantially different from that in 2009.
Sunoco has made tremendous progress in the last 12 months by improving our competitiveness across the
Company:
• Refining and Supply achieved an almost $500 million turnaround in pretax earnings, in large part
through self-help initiatives focused on improving margin capture and cost structure. Additionally, we
started up our ethanol plant on time and on budget.
• Chemicals achieved a turnaround in continuing phenol operations from a $21 million pretax loss in
2009 to a $23 million pretax profit in 2010.
• Retail Marketing earned $176 million in pretax profit in 2010. We also grew the business by adding
more than 100 retail locations to our portfolio.
• Logistics had another strong year of earnings and a record year for growth capital.
• Coke improved the reliability of its manufacturing operations and had its best ever safety performance
in coke manufacturing. We also announced our plans to separate the Coke business in order to unlock
shareholder value. We made progress on the separation plans and the preparations for that business to
operate as a stand-alone entity.
• Sunoco finished 2010 with a cash balance of approximately $1.5 billion, a significant improvement in
cash position as compared to the prior year-end.
These meaningful accomplishments—and more—strengthened the Company’s competitiveness and helped
make 2010 a significant improvement over 2009 despite the challenges presented by the marketplace.
Stay focused on executing our strategy
While there was modest improvement late in 2010, market conditions in 2011 will likely mirror what we
saw in 2010. Economic growth in the United States and globally will likely be slow. Refining capacity will be
added worldwide at a rate that outpaces demand for refined products.
In the face of this reality, becoming the leader in our markets capable of supplying whatever fuels customers
want or governments require demands that our various units work together more closely than ever before. Our
strategy to “pull” fuel through our system depends upon a synchronized team that executes each step of the value
chain flawlessly.
As we execute our strategy in 2011 toward achieving our aspiration to become the premier provider of fuels
in our markets, we need to:
•Focus on operational excellence—We cannot count on help from the marketplace. We must get the
fundamentals right: improve margin capture, lower our breakeven cost per barrel, and run our facilities
safely and reliably. With less of the supply for our branded network coming from our own refineries, it is
important that we become very effective buyers of product for resale to supply our customer obligations.
1In 2010, Sunoco reported pretax income attributable to Sunoco, Inc. shareholders of $256 million, which includes a net charge for special
items of $51 million.
2In 2009, Sunoco reported a pretax loss attributable to Sunoco, Inc. shareholders of $661 million, which includes a net charge for special
items of $494 million.