Sunoco 2004 Annual Report Download - page 28

Businesses. In November 2004, the Company issued $103 million of 30-year floating-rate
notes and used the proceeds to redeem its 7.60 percent environmental industrial revenue
bonds that were due in 2024. As a result of the above debt restructuring activities, pretax
interest expense is expected to decline approximately $20 million in 2005. In March 2004,
the Company issued $100 million of commercial paper and used the proceeds to repay its
maturing 7
1
⁄ 8 percent notes. Management believes there is sufficient borrowing capacity
available to pursue strategic investment opportunities as they arise. In addition, the Com-
pany has the option of issuing additional common or preference stock or selling an addi-
tional portion of its Sunoco Logistics Partners L.P. common units, and Sunoco Logistics
Partners L.P. has the option of issuing additional common units.
The Company has a shelf registration statement which provides the Company with financ-
ing flexibility to offer senior and subordinated debt, common and preferred stock, warrants
and trust preferred securities. Subsequent to the 2004 debt offering discussed above, $1,050
million remains available under this shelf registration statement. Sunoco Logistics Partners
L.P. also has a shelf registration statement, under which the Partnership may issue debt or
common units representing limited partnership interests. Subsequent to the Partnership’s
April 2004 equity offering, $365 million remains available under the Partnership’s shelf
registration statement. The amount, type and timing of any additional financings under
these registration 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 2005 2006-2007 2008-2009 Thereafter
Total debt:
Principal $ 1,482 $ 103 $ 192 $ 321 $ 866
Interest 65883154146275
Operating leases* 1,155 158 274 207 516
Purchase obligations:
Crude oil, other feedstocks and
refined products** 10,509 6,492 1,354 561 2,102
Convenience store items*** 1,341 315 622 404 —
Transportation and distribution 661 198 109 88 266
Fuel and utilities 158 104 54 — —
Obligations supporting financing
arrangements†899181646
Properties, plants and equipment 53 53 — — —
Other 177 56 66 35 20
$ 16,283 $7,571 $2,843 $1,778 $4,091
* Includes $277 million pertaining to lease extension options which are assumed to be exercised.
** 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. Approximately 36
percent of the $1,155 million of future minimum annual rentals relates to time charters for
marine transportation vessels. Most of these time charters contain terms of up to seven years
with renewal and sublease options. The lease payments consist of a fixed-price minimum
and a variable component based on spot-market rates. In the table above, the variable com-
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