Sunoco 2011 Annual Report Download - page 99

Also in July 2011, a wholly owned subsidiary of the Company, Sunoco Receivables Corporation, Inc.
(“SRC”), executed an agreement with four participating banks, extending its accounts receivable securitization
facility that was scheduled to expire in August 2011 by an additional 364 days. The updated facility permits
borrowings and supports the issuance of letters of credit by SRC up to a total of $250 million. Under the
receivables facility, certain subsidiaries of the Company will sell their accounts receivable from time to time to
SRC. In turn, SRC may sell undivided ownership interests in such receivables to commercial paper conduits in
exchange for cash or letters of credit. The Company has agreed to continue servicing the receivables for SRC.
Upon the sale of the interests in the accounts receivable by SRC, the conduits have a first priority perfected
security interest in such receivables and, as a result, the receivables will not be available to the creditors of the
Company or its other subsidiaries. At December 31, 2011, there was approximately $310 million of accounts
receivable eligible to support this facility; however, there were no borrowings outstanding under the facility as of
that date. The facility was being used to support letters of credit totaling $110 million at December 31, 2011.
In August 2011, the Partnership replaced its existing $458 million of credit facilities with two new credit
facilities totaling $550 million. The Partnership’s new credit facilities consist of a five-year $350 million
unsecured credit facility and a $200 million 364-day unsecured credit facility which is available to fund certain
inventory activities. There were no borrowings outstanding under the Partnership’s facilities at December 31,
2011. The $350 and $200 million credit facilities contain various covenants including the requirement that the
Partnership’s total debt to EBITDA ratio (each as defined in the facilities) not exceed 5.00 to 1. This ratio can
generally be increased to 5.50 to 1 during an acquisition period (as defined in the facilities). At December 31,
2011, the Partnership’s ratio of total debt to EBITDA was 3.1 to 1.
Cash payments for interest related to short-term borrowings and long-term debt (net of amounts capitalized)
were $132, $134 and $91 million in 2011, 2010 and 2009, respectively.
12. Other Deferred Credits and Liabilities
Other deferred credits and liabilities consist of the following (in millions of dollars):
December 31,
2011 2010
Asset retirement obligations* ............................................. $173 $ 98
Environmental remediation accrual (Note 13) ................................ 75 86
Self-insurance accrual ................................................... 71 78
Deferred revenue on power contract restructuring** ........................... 62 65
Unrecognized tax benefits and related interest and penalties (Note 4) .............. 28 29
Other ................................................................ 158 206
$567 $562
*Increase in 2011 primarily attributable to accruals established in connection with Sunoco’s decision to exit refining (Note 2).
**Amortizing over a 30-year period ending in 2035.
13. 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 2011, 2010 and
2009 amounted to $126, $155 and $178 million, respectively, which include contingent rentals totaling $23, $16
and $17 million, respectively. Approximately 27 percent of total rental expense was recovered through related
sublease rental income during 2011.
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