Both from an HES and a financial performance perspective, 2005 was an outstanding year for Sunoco. Financially, it was our best year since focusing purely on downstream manufacturing. The record performance was driven by our Refining and Supply business, and our Retail Marketing, Chemicals, and Coke businesses also contributed to a strong bottom line.

Highlights for 2005 include:

• Income before special items* a record $1,012 million ($7.36 per share);
• Return on capital employed (based on income before special items)** was a sector-leading 32.4%;
• Dividend increase of 33%; and
• Outstanding shares reduced by 4%.

Over the past three years Sunoco has:

• Generated approximately $2 billion in earnings before special items*;
• Provided a 400% total return to our shareholders;
• Increased total assets from $6.4 billion to $9.9 billion;
• Funded a capital program (including acquisitions) of approximately $3.1 billion;
• Reduced net debt-to-capital ratio (per our revolving credit agreement) from 45% on December 31, 2002 to 17% at year-end 2005;
• Repurchased over $1.1 billion of Sunoco common stock; and
• Increased the dividend by 60% (100% with a second quarter of 2006 increase).

We view the diversity of our portfolio as a key strength of the company, with each business offering good returns and growth prospects. We will continue to focus on:

• Increasing reliability and realizing additional efficiencies from existing assets;
• Prudently managing expenses;
• Efficiently managing capital spending with an increasing emphasis on income improvement projects;
• Growing, upgrading, and diversifying our asset base;
• Divesting assets that do not meet our return-on-investment criteria;
• Optimizing our capital structure; and
• Returning cash to our shareholders through the payment of cash dividends and the purchase of our common stock.

* Net income for 2005, 2004, and 2003 amounted to $974, $605, and $312 million, respectively, which includes net charges of $38, $24, and $23 million for special items.

** ROCE for 2005 (based on net income) was 31.3%.

Stock Price Performance
Year–End	Price Per Share
2001	$18.67
2002	$16.59
2003	$25.58
2004	$40.86
2005	$78.38

2001 - 2004 restated to reflect a two-for-one stock split of Sunoco's common stock that occurred on August 1, 2005.

HES Glossary
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Conversion Table
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Summary Report
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Capital Program
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Debt to Capital Ratio
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ROCE
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Net Income/Loss
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Sunoco Financial Annual Report
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