Sunoco 2005 Annual Report Download - page 25

In September 2004, the Company repurchased long-term debt with a par value of $352
million through a series of tender offers and open market purchases utilizing the net pro-
ceeds from the issuance of $250 million of 4
7
⁄ 8 percent, 10-year notes under its shelf regis-
tration statement (see below) and $154 million of cash. The Company recognized a $34
million after-tax loss in 2004 due to the early extinguishment of this debt, which is re-
ported separately under Corporate and Other in the Earnings Profile of Sunoco 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 ex-
pense declined 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. The commercial paper was repaid in October 2005. Management believes there is
sufficient financial capacity available to pursue strategic opportunities as they arise. In
addition, the Company has the option of issuing additional common or preference stock or
selling an additional 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 that provides the Company with financ-
ing flexibility to offer senior and subordinated debt, common and preferred stock, warrants
and trust preferred securities. At December 31, 2005, $1,050 million remains available
under this shelf registration statement. In the fourth quarter of 2005, Sunoco Logistics
Partners L.P. filed a registration statement to replace its existing registration statement,
which has $197 million available at December 31, 2005. When the new registration
statement becomes effective, the Partnership would be able to sell up to a total of $500
million of debt or common units in primary offerings to the public, and the Company
would be able to sell up to a total of five million common units, which represent a portion
of its limited partnership interests in the Partnership, in secondary offerings to the public.
The amount, type and timing of any future financings under these registration statements
will depend upon, among other things, the Company’s and Partnership’s funding require-
ments, 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 2006 2007-2008 2009-2010 Thereafter
Total debt:
Principal $ 1,411 $ 177 $ 13 $ 365 $ 856
Interest 586 85 156 139 206
Operating leases* 1,135 167 281 196 491
Purchase obligations:
Crude oil, other feedstocks and
refined products** 12,677 8,278 1,673 597 2,129
Convenience store items*** 935 285 563 87 —
Transportation and distribution 1,325 245 310 238 532
Fuel and utilities 99 78 21 — —
Obligations supporting financing
arrangements†80 9 17 16 38
Properties, plants and equipment 66 63 3 — —
Other 188 45 64 34 45
$18,502 $9,432 $3,101 $1,672 $4,297
* Includes $246 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.
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