Sunoco 2007 Annual Report Download - page 58

Sunoco Logistics Partners L.P. had a $300 million revolv-
ing credit facility, which was scheduled to mature in
November 2010. In August 2007, the Partnership re-
placed this facility with a new $400 million revolving
credit facility, which expires in November 2012. The new
facility is available to fund the Partnership’s working
capital requirements, to finance acquisitions, and for
general partnership purposes. Amounts outstanding under
these facilities totaled $91 and $68 million at De-
cember 31, 2007 and 2006, respectively. The new facility
contains a covenant requiring the Partnership to main-
tain a ratio of up to 4.75 to 1 of its consolidated total debt
(including letters of credit) to its consolidated EBITDA
(each as defined in the new facility). At December 31,
2007, the Partnership’s ratio of its consolidated debt to its
consolidated EBITDA was 2.7 to 1.
In November 2007, the Partnership entered into two
standby letters of credit totaling $130 million. The letters
of credit, which are effective January 1, 2008, are required
in connection with certain crude oil exchange contracts
in which the Partnership is a party. The letters of credit
are subject to commitment fees, which are not material.
12. Long-Term Debt
December 31
(Millions of Dollars) 2007 2006
9% debentures due 2024 $65 $65
7
3
⁄ 4 % notes due 2009 146 146
7
1
⁄ 4 % notes due 2012 250 250
6
3
⁄ 4 % notes due 2011 177 177
6
3
⁄ 4 % convertible subordinated debentures
due 2012 (Note 16) 77
6
1
⁄ 8 % notes due 2016 175 175
5
3
⁄ 4 % notes due 2017 400 400
4
7
⁄ 8 % notes due 2014 250 250
Floating-rate notes (interest of 3.49% at
December 31, 2007) due 2034 (Note 11) 103 103
Revolving credit loan, floating interest rate
(5.47% at December 31, 2007) due
2012 (Note 11) 91 68
Other 67 75
1,731 1,716
Less: unamortized discount 34
current portion 47
$1,724 $1,705
The aggregate amount of long-term debt maturing and
sinking fund requirements in the years 2008 through
2012 is as follows (in millions of dollars):
2008 $4 2011 $179
2009 $149 2012 $480
2010 $7
The $103 million of floating-rate notes due in 2034,
which are remarketed weekly, have been classified as
long-term debt as the Company intends to continue the
remarketing of the notes. In the event the notes are not
remarketed, the Company can refinance them on a long-
term basis utilizing its revolving credit facility (Note 11).
Cash payments for interest related to short-term borrow-
ings and long-term debt (net of amounts capitalized)
were $86, $84 and $67 million in 2007, 2006 and 2005,
respectively.
The following table summarizes Sunoco’s long-term debt
(including current portion) by issuer:
December 31
(Millions of Dollars) 2007 2006
Sunoco, Inc. $1,043 $1,043
Sunoco Logistics Partners L.P. 515 492
Other 170 177
$1,728 $1,712
13. Other Deferred Credits and Liabilities
Other deferred credits and liabilities consist of the
following:
December 31
(Millions of Dollars) 2007 2006
Self-insurance accrual $96 $109
Unrecognized tax benefits and related interest
and penalties (Note 4)* 86 —
Environmental remediation accrual
(Note 14) 83 85
Deferred revenue on power contract
restructuring** 73 76
Asset retirement obligations 69 68
Other 131 139
$538 $477
* At January 1, 2007, unrecognized tax benefits and related interest and penalties
totaled $55 million, which consisted of a $17 million ($12 million after tax)
cumulative effect adjustment to retained earnings that was recognized on January 1,
2007 upon adoption of FASB Interpretation No. 48 and $38 million that was reflected
in taxes payable and deferred income taxes in the consolidated balance sheet at
December 31, 2006.
** 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 2007, 2006 and 2005
amounted to $199, $199 and $198 million, respectively,
which include contingent rentals totaling $15, $13 and
$12 million, respectively. Approximately 6 percent of
total rental expense was recovered through related
sub-lease rental income during 2007.
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