Sunoco 2007 Annual Report Download - page 23

Contractual Obligations—The following table summarizes the Company’s significant con-
tractual obligations:
Payment Due Dates
(Millions of Dollars) Total 2008 2009-2010 2011-2012 Thereafter
Total debt:
Principal $ 1,728 $ 4 $ 156 $ 659 $ 909
Interest 708 106 199 157 246
Operating leases* 1,016 155 240 134 487
Purchase obligations:
Crude oil, other feedstocks and
refined products** 17,402 11,416 2,096 1,368 2,522
Convenience store items*** 362 235 127 — —
Transportation and distribution 1,789 330 490 438 531
Fuel and utilities 672 130 219 216 107
Obligations supporting financing
arrangements†62 8 16 16 22
Properties, plants and equipment 135 135 — — —
Other 138 33 43 26 36
$24,012 $12,552 $3,586 $3,014 $4,860
* Includes $232 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.
Sunoco’s operating leases include leases for marine transportation vessels, service stations,
office space and other property and equipment. Operating leases include all operating
leases that have initial noncancelable terms in excess of one year. Approximately 26 per-
cent of the $1,016 million of future minimum annual rentals 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 2007. The actual variable
component of the lease payments attributable to these time charters could vary sig-
nificantly from the estimates included in the table.
A purchase obligation is an enforceable and legally binding agreement to purchase goods
or services that specifies significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate timing of the
transaction. Sunoco has various obligations to purchase in the ordinary course of business:
crude oil, other feedstocks and refined products; convenience store items; transportation
and distribution services, including pipeline and terminal throughput and railroad services;
and fuel and utilities. Approximately one third of the contractual obligations to purchase
crude oil, other feedstocks and refined products reflected in the above table for 2008 relates
to spot-market purchases to be satisfied within the first 60-90 days of the year. Sunoco also
has contractual obligations supporting financing arrangements of third parties, contracts to
acquire or construct properties, plants and equipment, and other contractual obligations,
primarily related to services and materials, including commitments to purchase supplies
and various other maintenance, systems and communications services. Most of Sunoco’s
purchase obligations are based on market prices or formulas based on market prices. These
purchase obligations generally include fixed or minimum volume requirements. The pur-
chase obligation amounts in the table above are based on the minimum quantities to be
purchased at estimated prices to be paid based on current market conditions. Accordingly,
the actual amounts may vary significantly from the estimates included in the table.
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