Sunoco 2005 Annual Report Download - page 60

10. Short-Term Borrowings and Credit Facilities
The Company has a revolving credit facility (the
“Facility”) totaling $900 million, which matures in Au-
gust 2010. The Facility provides the Company with ac-
cess to short-term financing and is intended to support
the issuance of commercial paper, letters of credit and
other debt. The Company also can borrow directly from
the participating banks under the Facility. The Facility is
subject to commitment fees, which are not material.
Under the terms of the Facility, Sunoco is required to
maintain tangible net worth (as defined in the Facility)
in an amount greater than or equal to targeted tangible
net worth (targeted tangible net worth being determined
by adding $1.125 billion and 50 percent of the excess of
net income over share repurchases (as defined in the Fa-
cility) for each quarter ended after March 31, 2004). At
December 31, 2005, the Company’s tangible net worth
was $2.3 billion and its targeted tangible net worth was
$1.3 billion. The Facility also requires that Sunoco’s ratio
of consolidated net indebtedness, including borrowings of
Sunoco Logistics Partners L.P., to consolidated capital-
ization (as those terms are defined in the Facility) not
exceed .60 to 1. At December 31, 2005, this ratio was .17
to 1. At December 31, 2005, the Facility was being used
to support $103 million of floating-rate notes due in 2034
(Note 11).
Sunoco Logistics Partners L.P. has a revolving credit fa-
cility, which was scheduled to mature in November 2009.
In December 2005, the facility was amended to increase
the amount available under the facility from $250 million
to $300 million and to extend its term until November
2010. This facility is available to fund the Partnership’s
working capital requirements, to finance acquisitions, and
for general partnership purposes. It includes a $20 million
distribution sublimit that is available for distributions to
third-party unitholders and Sunoco. Amounts out-
standing under the facility totaled $107 and $65 million
at December 31, 2005 and 2004, respectively. The credit
facility contains covenants requiring the Partnership to
maintain a ratio of up to 4.75 to 1 of its consolidated total
debt to its consolidated EBITDA (each as defined in the
credit facility) and an interest coverage ratio (as defined
in the credit facility) of at least 3 to 1. At December 31,
2005, the Partnership’s ratio of its consolidated debt to its
consolidated EBITDA was 2.9 to 1 and the interest cover-
age ratio was 5.2 to 1.
Epsilon, the Company’s consolidated joint venture, has a
$40 million revolving credit facility that matures in Sep-
tember 2006. The credit facility contains restrictive
covenants which, among other things, limit the in-
currence of additional debt and the sale of assets by Epsi-
lon. At December 31, 2005, no amounts were out-
standing under the credit facility. Any borrowings under
this credit facility as well as Epsilon’s $120 million term
loan that is also due in September 2006 (Note 11) are
guaranteed by Sunoco, Inc. The term loan is collateral-
ized by the joint venture’s polypropylene facility, which
had a carrying value of $82 million at December 31,
2005.
11. Long-Term Debt
December 31
(Millions of Dollars) 2005 2004
9
3
⁄ 8 % debentures, payable $16 in 2014 and
$20 in 2015 and 2016 $56 $56
9% debentures due 2024 65 65
7
3
⁄ 4 % notes due 2009 146 146
7
1
⁄ 4 % notes due 2012 250 250
6
7
⁄ 8 % notes due 2006 54 54
6
3
⁄ 4 % notes due 2011 177 177
6
3
⁄ 4 % convertible subordinated debentures
due 2012 (Note 14) 79
4
7
⁄ 8 % notes due 2014 250 250
Floating-rate notes (interest of 3.69% at
December 31, 2005) due 2034 (Note 10) 103 103
Revolving credit loan, floating interest rate
(4.74% at December 31, 2005) due 2010
(Note 10) 107 65
Floating-rate notes (interest of 4.74% at
December 31, 2005) due 2006 (Note 10) 120 120
Revolving credit loans paid in 2005
(Note 10) —6
Other 79 85
1,414 1,386
Less: unamortized discount 34
current portion 177 3
$1,234 $1,379
The aggregate amount of long-term debt maturing and
sinking fund requirements in the years 2006 through
2010 is as follows (in millions of dollars):
2006 $177 2009 $148
2007 $8 2010 $217
2008 $5
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