Sunoco 2010 Annual Report Download - page 100
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13. Other Deferred Credits and Liabilities
Other deferred credits and liabilities consist of the following (in millions of dollars):
December 31
2010 2009
Asset retirement obligations ......................................... $ 98 $ 94
Environmental remediation accrual (Note 14) ........................... 86 84
Self-insurance accrual ............................................. 78 79
Deferred revenue on power contract restructuring* ...................... 65 68
Unrecognized tax benefits and related interest and penalties (Note 4) ...... 29 31
Other ........................................................... 206 165
$562 $521
*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 2010, 2009 and
2008 amounted to $155, $178 and $229 million, respectively, which include contingent rentals totaling $16, $17
and $19 million, respectively. Approximately 27 percent of total rental expense was recovered through related
sub-lease rental income during 2010.
The aggregate amount of future minimum annual rentals 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:
2011 ............................................... $102 $ — $102
2012 ............................................... 89 1 90
2013 ............................................... 71 3 74
2014 ............................................... 51 3 54
2015 ............................................... 42 5 47
Thereafter .......................................... 159 153 312
Future minimum lease payments ...................... $514 $165 679
Less: Sub-lease rental income .......................... (59)
Net minimum lease payments ........................ $620
Approximately 26 percent of the aggregate amount of future minimum annual rentals applicable to
noncancelable operating leases relates to time charters for marine transportation vessels. Most of these time
charters contain terms of between one to four 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 2010. The actual variable component of the lease payments attributable to
these time charters could vary significantly from the estimates included in the table.
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