This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sunoco Announces Strategic Initiatives And Management Changes

Stocks in this article: SUN

Sunoco, Inc. (NYSE: SUN) announced it will focus on its high-return logistics and retail businesses and undertake a series of initiatives to improve its financial and strategic flexibility to better position itself to deliver sustainable value to shareholders. The initiatives are intended to improve future earnings potential, limit future liabilities and provide Sunoco with a well-positioned financial and operational platform as well as an expense structure that is comparable to companies in the logistics and retail space.

The initiatives include:

  • Repurchasing up to 19.9% of Sunoco common shares in open market purchases over the next 12 – 18 months.
  • Increasing the quarterly dividend per share by 33% from 15 cents to 20 cents.
  • Reducing Sunoco’s leverage by repurchasing up to $400 million of outstanding debt over the next year.
  • Eliminating the need for pension fund contributions for the foreseeable future by contributing $80 million pre-tax to the pension fund.
  • Eliminating future retiree medical expense by restructuring retiree medical liability and contributing approximately $200 million pre-tax to a dedicated Trust.
  • Establishing a segregated environmental fund via a captive insurance company of approximately $250 million to be used for remediation of legacy environmental obligations.

Sunoco’s board and senior management, in consultation with independent financial and legal advisors, considered a wide range of strategic alternatives intended to deliver enhanced shareholder value. The initiatives announced today position Sunoco for growth and success while providing Sunoco with strategic and financial flexibility for the future.

Management Changes

In light of the company’s exit from manufacturing and its go-forward strategy, the following management changes were announced:

  • Brian P. MacDonald, senior vice president and chief financial officer, will become president, chief executive officer, and a director of Sunoco, effective March 1, 2012. Sunoco’s current chairman, president, and chief executive officer, Lynn L. Elsenhans, will step aside as chief executive officer and president at that time.
  • Ms. Elsenhans will remain chairman of Sunoco, Inc. and Sunoco Logistics Partners L.P. (NYSE: SXL) until Sunoco’s Annual Meeting of Shareholders in May 2012, at which time Mr. MacDonald will become chairman of Sunoco, Inc. and Sunoco Logistics Partners L.P.
  • Michael Hennigan, currently president and chief operating officer of Sunoco Logistics, will become president and chief executive officer of Sunoco Logistics effective March 1, 2012.

Regarding the management changes, Presiding Director John P. Jones said, “Lynn Elsenhans has led Sunoco through one of the most significant periods of change in the Company’s history. With her deep expertise in manufacturing, Lynn has been instrumental in driving portfolio actions to reposition the company. Under her leadership, Lynn has overseen the sale of Sunoco’s heating oil and chemical businesses, the spin-off of SunCoke Energy, and the exit of the refining business, representing two-thirds of Sunoco’s assets since the time Lynn joined the company in 2008. While very difficult for employees and other Sunoco stakeholders, the restructuring was absolutely necessary to provide for a sustainable future for the Company and its stakeholders. We value Lynn’s insight and leadership, and on behalf of the Board, I want to thank her for her service and wish her all the best in her future endeavors.”

1 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,802.82 +24.67 0.14%
S&P 500 2,068.71 +7.48 0.36%
NASDAQ 4,757.7510 +9.3550 0.20%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs