Sunoco 2009 Annual Report Download - page 95
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13. Other Deferred Credits and Liabilities
Other deferred credits and liabilities consist of the following (in millions of dollars):
December 31
2009 2008
Asset retirement obligations ......................................... $ 94 $ 73
Environmental remediation accrual (Note 14) ........................... 84 87
Self-insurance accrual ............................................. 79 84
Deferred revenue on power contract restructuring* ...................... 68 70
Unrecognized tax benefits and related interest and penalties (Note 4) ...... 31 56
Other ........................................................... 165 163
$521 $533
*Amortized over a 30-year period ending in 2035.
14. Commitments and Contingent Liabilities
Leases and Other Commitments
Sunoco, as lessee, has noncancelable operating leases for marine transportation vessels, service stations,
office space and other property and equipment. Total rental expense for such leases for the years 2009, 2008 and
2007 amounted to $178, $229 and $199 million, respectively, which include contingent rentals totaling $17, $19
and $15 million, respectively. Approximately 6 percent of total rental expense was recovered through related
sub-lease rental income during 2009.
The aggregate amount of future minimum annual rentals applicable to noncancelable operating leases,
including amounts pertaining to lease extension options which are assumed to be exercised, are as follows (in
millions of dollars):
Current
Lease
Term
Lease
Extension
Options Total
Year ending December 31:
2010 ............................................... $123 $ — $123
2011 ............................................... 82 2 84
2012 ............................................... 66 4 70
2013 ............................................... 49 6 55
2014 ............................................... 42 6 48
Thereafter ........................................... 197 154 351
Future minimum lease payments ...................... $559 $172 731
Less: Sub-lease rental income .......................... (16)
Net minimum lease payments ......................... $715
Approximately 24 percent of the aggregate amount of future minimum annual rentals applicable to
noncancelable operating leases relates to time charters for marine transportation vessels. Most of these time
charters contain terms of between three to seven years with renewal and sublease options. The time charter leases
typically require a fixed-price payment or a fixed-price minimum and a variable component based on spot-
market rates. In the table above, the variable component of the lease payments has been estimated utilizing the
average spot-market prices for the year 2009. The actual variable component of the lease payments attributable to
these time charters could vary significantly from the estimates included in the table.
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