Sunoco 2003 Annual Report Download - page 27

the Partnership may sell up to a total of $500 million of debt or common units representing
limited partner interests.The amount, type and timing of any financings under these regis-
tration statements will depend upon, among other things, the Company’s and Partnership’s
funding requirements, market conditions and compliance with covenants contained in the
Company’s and Partnership’s respective debt obligations and revolving credit facilities.
Contractual Obligations — The following table summarizes the Company’s significant con-
tractual obligations:
Payment Due Dates
(Millions of Dollars) Total 2004 2005-2006 2007-2008 Thereafter
Long-term debt:
Principal $ 1,453 $ 103 $ 222 $ 53 $1,075
Interest 913 101 193 168 451
Operating leases 780 123 197 167 293
Purchase obligations:
Crude oil, other feedstocks and
refined products* 6,822 4,790 601 243 1,188
Convenience store items** 1,757 247 707 696 107
Transportation and distribution 334 80 59 38 157
Fuel and utilities 202 93 95 14 —
Obligations supporting financing
arrangements*** 97 9181753
Properties, plants and equipment 107 95 12 — —
Other 30 612 9 3
$12,495 $5,647 $2,116 $1,405 $3,327
* Includes feedstocks for chemical manufacturing and coal purchases for cokemaking operations.
** Actual amounts will vary based upon the number of Company-operated convenience stores and the level of purchases.
*** Represents fixed and determinable obligations to secure wastewater treatment services at the Toledo refinery and coal handling
services at the Indiana Harbor cokemaking facility.
Sunoco’s operating leases include leases for marine transportation vessels, service stations,
office space and other property and equipment. Operating leases include all operating
leases that have initial or remaining noncancelable terms in excess of one year. Approx-
imately one half of the $780 million of future minimum annual rentals relates to time
charters for marine transportation vessels. Most of these time charters were recently en-
tered into by the Company and contain seven-year terms with renewal and sublease op-
tions. The lease payments consist of a fixed-price minimum and a variable component
based on spot-market rates. In the table above, the variable component of the lease pay-
ments has been estimated utilizing the average spot market prices for the year 2003. The
actual variable component of the lease payments attributable to these time charters could
vary significantly from the estimates included in the table.
A purchase obligation is an enforceable and legally binding agreement to purchase goods
and services that specifies significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate timing of the
transaction. Sunoco has various obligations to purchase in the ordinary course of business:
crude oil, other feedstocks and refined products; convenience store items; transportation
and distribution services, including pipeline and terminal throughput and railroad services;
and fuel and utilities. Approximately one third of the contractual obligations to purchase
crude oil and other feedstocks and refined products for 2004 relates to spot-market pur-
chases to be satisfied within the first 60-90 days of the year. Sunoco also has contractual
obligations supporting financing arrangements of third parties, contracts to acquire or con-
struct properties, plants and equipment, and other contractual obligations, primarily re-
lated to services and materials, including commitments to purchase supplies and various
other maintenance, systems and communications services. Most of Sunoco’s purchase obli-
gations are based on market prices or formulas based on market prices. These purchase
obligations generally include fixed or minimum volume requirements. The purchase
obligation amounts in the table above are based on the minimum quantities to be pur-
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