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SUN COMPANY SETS NEW DIRECTION, TAKES WRITE-DOWN, REPORTS THIRD QUARTER EARNINGS

 SUN COMPANY SETS NEW DIRECTION,
 TAKES WRITE-DOWN, REPORTS THIRD QUARTER EARNINGS
 PHILADELPHIA, Oct. 30 /PRNewswire/ -- Sun Company, Inc. (NYSE: SUN) today announced a new strategic direction that it projects will increase operating income by approximately $150 million a year, beginning in 1993.
 At the same time, the company reported a third quarter loss of $320 million due to write-downs associated with implementation of the new business strategy and other activities. Operating income for the quarter was $22 million, compared to break even in the 1991 third quarter.
 New Direction Set
 Sun Company Chairman and CEO Robert H. Campbell said the key to Sun's new strategy is growth in its value-added businesses, which he identified as branded gasoline marketing in the Northeastern U.S., chemicals, lubricants, and logistics.
 "In order to focus on these businesses," he said, "we decided to first exit from other areas. We started last year with the announcement that we would begin an orderly disposition of Radnor Corporation's real estate holdings. We continued this year with our decision to seek buyers for our coal business and our decision to withdraw from branded gasoline marketing in Oklahoma, Missouri, and Iowa and to reconfigure our Tulsa Refinery to produce mainly lubricants."
 Campbell announced that the following additional withdrawals, restructurings, and income improvement activities would be carried out as part of the new strategy:
 -- an orderly withdrawal from all oil and gas exploration activity outside of Canada; however, existing exploration commitments will be honored, and production and development activities in Colombia and the U.K. North Sea will be continued;
 -- conversion from the current "bucketwheel" method of mining Canadian oil sands to a truck-and-shovel method, substantially reducing production costs at Suncor, Sun's Canadian subsidiary; reduction of Sun's ownership in Suncor from the current 68 percent to 55 percent, when warranted by market conditions;
 -- planned reconfiguration of the company's Puerto Rico refinery to produce predominantly lubricants, much the same as is being done at the Tulsa Refinery; and
 -- possible reconfiguration or joint venture operation of the company's Toledo, Ohio, refinery, which supplies the Upper Midwest.
 "These actions will provide improved income and cash for investment in the areas we have identified for growth -- namely, our Sunoco and Atlantic brands in the Northeastern United States, our worldwide lubricants business, our chemicals business, and our pipeline and terminaling businesses," Campbell said. "We have a strong competitive position in each of these profitable businesses, and we believe they provide excellent opportunities for growth."
 Campbell said the new strategy is expected to strengthen Sun's earnings, improve its return on equity, and increase shareholder value. "We project that, even with no improvement in marketplace fundamentals, our new strategy will increase operating income in 1993 by approximately $150 million over what it otherwise would be," he said.
 The largest part of this income improvement -- an estimated $70 million after-tax -- will come from lower expenses associated with the withdrawal from oil and gas exploration activities outside of Canada, Campbell said. The remainder will come principally from operational improvements at Suncor, the lubricants emphasis at the Tulsa and Puerto Rico facilities, improvements in branded marketing and at the Toledo Refinery, and savings in purchasing activities and expenses, according to Campbell.
 Third Quarter Earnings
 For the quarter, Sun reported income before special charges of $22 million ($.21 per share), but a net loss of $320 million ($3.01 per share) due to $459 million after-tax in asset write-downs and other matters related largely to the company's new strategic plan. Also included in the quarter's results was a $117 million after-tax gain from the previously announced $130 million cash payment to be made by Iran for its expropriation of Sun's oil production interests following the Iranian Revolution. Revenues were $3.07 billion.
 In last year's third quarter, Sun broke even before special charges, but reported a loss of $436 million ($4.11 per share) due to losses related to its decision to dispose of the real estate holdings of Radnor Corporation, to an accrual for environmental remediation work at various domestic refining and marketing sites, and to employee termination costs associated with a corporate restructuring. Revenues were $2.95 billion.
 Campbell attributed the $22 million increase in operating results to:
 -- lower expenses, slightly higher product margins, and a $6 million after-tax gain on the sale of a pipeline terminal in Sun's domestic refining and marketing segment, contributing to a $31 million increase in income; and
 -- lower exploration and depreciation expenses, partially offset by lower crude oil production volumes, in Sun International Exploration and Production Company, reducing the quarterly loss from $16 million in 1991 to $11 million this year.
 Partially offsetting these increases in income were:
 -- an increase of $4 million in net after-tax financing expenses due to lower leasing income and higher interest expense associated with long-term debt, and
 -- a $12 million decline in income at Suncor.
 The decline at Suncor was due largely to lower earnings in the refining and marketing segment. Despite four percent higher refined product sales volumes, refining and marketing income declined by $11 million due to weaker gasoline margins and the absence of a $6 million after-tax gain on the sale of an ocean-going vessel recorded in the third quarter of 1991. Income from the Oil Sands Group was unchanged as higher Crown royalty expense offset a six percent increase in production of synthetic crude. Campbell said he expects high levels of synthetic crude production to continue, enabling the Oil Sands Group to meet its annual production target of 60,000 barrels per day despite a fire earlier in the year.
 Special Charges
 Campbell said most of the $459 million in third quarter 1992 after- tax special charges was a necessary first step before the company could implement its new strategy. The charges are:
 -- a $200 million after-tax loss provision related to the company's decision to withdraw from oil and gas exploration activities outside of Canada and to dispose of certain marginal crude oil producing properties;
 -- $148 million related to restructuring efforts at Suncor;
 -- $61 million related to Sun's previously-announced decision to downsize and reconfigure its Tulsa, Okla., refining and marketing operations; and
 -- $50 million in miscellaneous write-downs and accruals related to various Sun facilities and operations.
 Campbell said the Suncor write-downs were attributable partially to the subsidiary's decision to move from the current bucketwheel method of mining the oil sands to a more flexible and efficient truck-and-shovel operation. The Suncor provision also includes the write-down of certain oil and gas properties, including the Burnt Lake heavy oil property in northeastern Alberta, to their net recoverable value. A write-down of a technologically obsolete utilities plant is also included.
 Nine Month Earnings
 For the first nine months of 1992, Sun reported income before special charges of $15 million ($.14 per share) versus income before special charges of $105 million ($.99 per share) for the same period in 1991.
 However, large special items in both periods resulted in substantial net losses. The nine-month net loss in 1992 was $596 million ($5.61 per share), compared with a net loss of $352 million ($3.32 per share) for the same period last year.
 In addition to the net special charges of $342 million after-tax included in the 1992 third quarter results, the 1992 year-to-date results include a $261 million after-tax charge from the adoption of a new accounting standard regarding post-retirement benefits other than pensions, and an $8 million after-tax loss from a secondary offering of four million shares of Suncor common stock.
 The after-tax charge for post-retirement benefits recognizes Sun's obligation under its existing retiree medical and life insurance plans. The adoption is effective as of Jan. 1, 1992, and was therefore applied retroactively to Sun's first quarter results, which have been restated to reflect the $261 million after-tax charge. Incremental expenses for the nine-month period attributable to adoption were $9 million after-tax and are included in the third quarter operating results. Sun's post- retirement medical plans are currently being reviewed by management, and it is expected that modifications will be made that will reduce both the amount of the obligation and the ongoing annual expense.
 The 1991 nine-month results include a $457 million after-tax loss attributable principally to employee terminations, an accrual for environmental remediation work at various domestic refining and marketing sites, and after-tax losses from discontinued real estate operations.
 Revenues were $8.29 billion for the 1992 nine months compared with $8.96 billion in 1991.
 Campbell attributed the decline in earnings before special items to:
 -- lower earnings in domestic refining and marketing operations due to significantly lower margins, partially offset by higher refined product sales volumes and lower administrative and operating expenses; and
 -- lower earnings at Suncor, largely attributable to lower synthetic crude oil prices, an increased Crown royalty on synthetic crude oil production, lower margins on refined product sales, and the absence of a favorable consolidating adjustment recorded in 1991; also contributing to the decline were lower synthetic crude oil production volumes in the second quarter of 1992 caused by a fire at the oil sands plant, and the absence of a $6 million after-tax gain on the sale of an ocean-going vessel.
 Lower corporate administrative expenses resulting from the 1991 restructuring were partially offset by higher net financing expenses.
 SUN COMPANY, INC.
 Financial Summary
 Third Quarter 1992 1991
 Revenues $3,070,000,000 $2,950,000,000
 Net Income (Loss) $(320,000,000) $(436,000,000)
 Net Income (Loss) per Share
 of Common Stock $(3.01) $(4.11)
 Weighted Average Number of
 Common Shares Outstanding
 (In Thousands) 106,233 106,028
 Nine Months
 Revenues $8,290,000,000 $8,960,000,000
 Net Income (Loss) $(596,000,000) $(352,000,000)
 Net Income (Loss) per Share
 of Common Stock $(5.61) $(3.32)
 Weighted Average Number of
 Common Shares Outstanding
 (In Thousands) 106,172 106,074
 SUN COMPANY, INC.
 Earnings Profile of Sun Businesses (after tax)
 (Millions of Dollars)
 Three Months Ended Sept. 30 1992 1991 Variance
 REFINING AND MARKETING $ 39 $ 8 $ 31
 INTERNATIONAL EXPLORATION AND
 PRODUCTION (11) (16) 5
 CANADA (SUNCOR)
 Exploration and Production 1 -- 1
 Oil Sands 6 6 --
 Refining and Marketing 1 12 (11)
 Corporate Expenses(A) (3) (2) (1)
 Net Financing Expenses (1) -- (1)
 Total Canada (Suncor) 4 16 (12)
 COAL 5 4 1
 CORPORATE
 Corporate Expenses (7) (8) 1
 Net Financing Expenses(B) (8) (4) (4)
 22 -- 22
 IRANIAN LITIGATION SETTLEMENT 117 -- 117
 PROVISION FOR WRITE-DOWN OF
 ASSETS AND OTHER MATTERS (459) (124) (335)
 ACCRUAL FOR ENVIRONMENTAL
 REMEDIATION(C) -- (78) 78
 LOSS FROM DISCONTINUED
 OPERATIONS -- (234) 234
 CONSOLIDATED NET INCOME (LOSS) $(320) $(436) $ 116
 NET INCOME (LOSS) PER SHARE
 OF COMMON STOCK $(3.01) $(4.11)
 (A) Includes consolidation adjustments.
 (B) Includes after-tax income attributable to leasing operations of $1 million in 1992 and $3 million in 1991.
 (C) Represents accrual for environmental remediation work at various domestic refining and marketing sites.
 SUN COMPANY, INC.
 Earnings Profile of Sun Businesses (after tax)
 (Millions of Dollars)
 Nine Months Ended Sept. 30 1992 1991 Variance
 REFINING AND MARKETING $ 63 $ 119 $ (56)
 INTERNATIONAL EXPLORATION AND
 PRODUCTION (21) (27) 6
 CANADA (SUNCOR)
 Exploration and Production 1 1 --
 Oil Sands -- 27 (27)
 Refining and Marketing 4 15 (11)
 Corporate Expenses(A) (7) 4 (11)
 Net Financing Expenses (3) (3) --
 Total Canada (Suncor) (5) 44 (49)
 COAL 18 14 4
 CORPORATE
 Corporate Expenses (16) (28) 12
 Net Financing Expenses(B) (24) (17) (7)
 15 105 (90)
 LOSS ON SALE OF SUNCOR STOCK (8) -- (8)
 IRANIAN LITIGATION SETTLEMENT 117 -- 117
 PROVISION FOR WRITE-DOWN OF
 ASSETS AND OTHER MATTERS (459) (124) (335)
 ACCRUAL FOR ENVIRONMENTAL
 REMEDIATION(C) -- (78) 78
 LOSS FROM DISCONTINUED
 OPERATIONS -- (255) 255
 CUMULATIVE EFFECT OF CHANGE
 IN ACCOUNTING PRINCIPLE (261) -- (261)
 CONSOLIDATED NET INCOME (LOSS) $(596) $(352) $(244)
 NET INCOME (LOSS) PER SHARE OF
 COMMON STOCK $(5.61) $(3.32)
 (A) Includes consolidation adjustments.
 (B) Includes after-tax income attributable to leasing operations of $1 million in 1992 and $2 million in 1991.
 (C) Represents accrual for environmental remediation work at various domestic refining and marketing sites.
 SUN COMPANY, INC.
 Quarterly Financial and Operating Statistics (Preliminary)
 Periods ended Quarter Nine Months
 Sept. 30 1992 1991 1992 1991
 REFINING AND MARKETING
 Input to Crude Units
 (Thousand Barrels Daily) 550.7 562.1 537.4 530.3
 Refining Input as Percent of
 Rated Capacity 92 94 90 88
 Sales of Refined Products
 (Thousand Barrels Daily):
 Gasoline 312.8 327.8 311.6 311.3
 Middle Distillates 154.2 164.5 167.8 157.5
 Residual Fuel 44.9 41.5 50.9 38.2
 Petrochemicals 30.6 25.0 29.3 24.8
 Lubricants 17.9 18.3 18.1 17.6
 Asphalt 42.3 36.9 28.8 26.3
 Propane 15.0 14.6 14.3 13.3
 Other 21.8 29.3 22.4 30.6
 Total 639.5 657.9 643.2 619.6
 INTERNATIONAL EXPLORATION AND
 PRODUCTION
 Net Production of Crude Oil
 and Condensate
 (Thousand Barrels Daily) 39.6 47.6 42.7 47.5
 Average Price (Per Barrel) $19.60 $18.38 $18.54 $18.22
 Natural Gas-North Sea
 (Million Cubic Feet Daily) 20 20 40 52
 Average Price
 (Per Thousand Cubic Feet) $3.43 $3.28 $3.44 $3.56
 Exploration Expenses
 (Millions of Dollars) $15 $22 $42 $55
 CANADA (SUNCOR)
 Net Production of Crude Oil
 and Condensate
 (Thousand Barrels Daily) 9.7 8.7 9.6 8.8
 Average Price (Per Barrel) $18.61 $18.93 $17.11 $18.23
 Natural Gas
 (Million Cubic Feet Daily) 108 68 109 75
 Average Price
 (Per Thousand Cubic Feet) $.99 $1.14 $1.00 $1.22
 Exploration Expenses
 (Millions of Dollars) $4 $3 $13 $13
 Synthetic Crude Oil Produced
 for Shipment
 (Thousand Barrels Daily) 63.3 59.7 58.2 61.9
 Average Price (Per Barrel) $20.43 $20.29 $18.83 $19.77
 Input to Crude Units
 (Thousand Barrels Daily) 71.7 75.7 70.2 70.5
 Refining Input as Percent of
 Rated Capacity 102 108 100 101
 Sales of Refined Products
 (Thousand Barrels Daily):
 Gasoline 44.3 44.7 43.4 42.5
 Middle Distillates 19.8 18.4 21.1 19.1
 Other 16.1 13.8 17.5 17.1
 Total 80.2 76.9 82.0 78.7
 COAL
 Coal Production (Thousand Tons):
 Bituminous:
 Metallurgical 536 494 1,541 1,607
 Steam 1,773 1,933 5,576 5,977
 Subbituminous 3,249 2,708 10,210 10,213
 Total 5,558 5,135 17,327 17,797
 Coke Production (Thousand Tons) 164 159 482 463
 /delval/
 -0- 10/30/92
 /CONTACT: On Oct. 30: Dick Jackman, 215-977-6541, or Beverly Dotter, 215-977-6537; or thereafter: Bud Davis (media), 215-977-3485, or Katie Turner (investors), 215-977-6106, all of Sun Co./
 (SUN) CO: Sun Company Incorporated ST: Pennsylvania IN: OIL SU: ERN


MK -- PH003 -- 6944 10/30/92 08:11 EST
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