Sunoco 2011 Annual Report Download - page 100

Download and view the complete annual report

Please find page 100 of the 2011 Sunoco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 136

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136

The aggregate amount of future minimum annual rentals (excluding approximately $20 million aggregate
minimum payments attributable to SunCoke Energy) 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:
2012 .................................................... $ 81 $ — $ 81
2013 .................................................... 68 1 69
2014 .................................................... 50 2 52
2015 .................................................... 44 4 48
2016 .................................................... 36 6 42
Thereafter ............................................... 128 164 292
Future minimum lease payments ............................ $407 $177 584
Less: Sublease rental income ................................ (65)
Net minimum future lease payments ......................... $519
Approximately 20 percent of the aggregate amount of future minimum annual rentals applicable to
noncancelable operating leases relates to time charters for marine transportation vessels.
Over the years, Sunoco has sold thousands of retail gasoline outlets as well as refineries, terminals, coal
mines, oil and gas properties and various other assets. In connection with these sales, the Company has
indemnified the purchasers for potential environmental and other contingent liabilities related to the period prior
to the transaction dates. In most cases, the effect of these arrangements was to afford protection for the
purchasers with respect to obligations for which the Company was already primarily liable. While some of these
indemnities have spending thresholds which must be exceeded before they become operative, or limits on
Sunoco’s maximum exposure, they generally are not limited. The Company recognizes the fair value of the
obligations undertaken for all guarantees entered into or modified after January 1, 2003. In addition, the
Company accrues for any obligations under these agreements when a loss is probable and reasonably estimable.
The Company cannot reasonably estimate the maximum potential amount of future payments under these
agreements.
Environmental Remediation Activities
Sunoco is subject to extensive and frequently changing federal, state and local laws and regulations,
including, but not limited to, those relating to the discharge of materials into the environment or that otherwise
relate to the protection of the environment, waste management and the characteristics and composition of fuels.
As with the industry generally, compliance with existing and anticipated laws and regulations increases the
overall cost of operating Sunoco’s businesses, including remediation, operating costs and capital costs to
construct, maintain and upgrade equipment and facilities.
Existing laws and regulations result in liabilities and loss contingencies for remediation at Sunoco’s
facilities and at formerly owned or third-party sites. The accrued liability for environmental remediation is
classified in the consolidated balance sheets as follows (in millions of dollars):
December 31,
2011 2010
Accrued liabilities ...................................................... $ 35 $ 29
Other deferred credits and liabilities ........................................ 75 86
$110 $115
92