Sunoco 2010 Annual Report Download - page 35

Funding, especially on terms acceptable to us, may not be available to meet our future capital needs because
of the volatility in the credit and capital markets.
Global market and economic conditions have been, and continue to be volatile. In the event of a significant
downturn in the market, the cost of raising money in the debt and equity capital markets could increase
substantially and the availability of funds from those markets could diminish significantly. In addition, the cost of
obtaining money from the credit markets could increase if lenders and institutional investors increase interest
rates, enact tighter lending standards and reduce and/or cease to provide funding to borrowers.
The banks that participate in our revolving credit facilities are subject to the turmoil and volatility of the
global economic market. If one or more of these banks were to declare bankruptcy or otherwise be unable to fund
its loan commitments under our credit facilities, we may be unable to obtain the full amount of the funds
available under the credit facilities and therefore be unable to satisfy our cash requirements.
If funding is not available when needed, or is available only on unfavorable terms, meeting our capital needs
or otherwise taking advantage of business opportunities or responding to competitive pressures may become
challenging, which could have a material adverse effect on our revenues and results of operations.
We have various credit agreements and other financing arrangements that impose certain restrictions on us
and may limit our flexibility to undertake certain types of transactions. If we fail to comply with the terms and
provisions of our debt instruments, the indebtedness under them may become immediately due and payable,
which could have a material adverse effect on our financial position.
Several of our existing debt instruments and financing arrangements contain restrictive covenants that limit
our financial flexibility and that of our subsidiaries. Our credit facilities require the maintenance of certain
financial ratios, satisfaction of certain financial condition tests and, subject to certain exceptions, impose
restrictions on:
• incurrence of additional indebtedness;
• issuance of preferred stock by our subsidiaries;
• incurrence of liens;
• sale and leaseback transactions;
• agreements by our subsidiaries, which would limit their ability to pay dividends, make distributions or
repay loans or advances to us; and
• fundamental changes, such as certain mergers and dispositions of assets.
The Partnership has a credit facility that contains similar covenants. Increased borrowings by this subsidiary
will raise the level of our total consolidated net indebtedness, and could restrict our ability to borrow money or
otherwise incur additional debt.
If we do not comply with the covenants and other terms and provisions of our credit facilities, we will be
required to request a waiver under, or an amendment to, those facilities. If we cannot obtain such a waiver or
amendment, or if we fail to comply with the covenants and other terms and provisions of our indentures, we
would be in default under our debt instruments, which could trigger a default under the Partnership’s debt
facilities as well. Likewise, a default by the Partnership on its debt could cause a default under our debt
instruments. Any defaults may cause the indebtedness under the facilities to become immediately due and
payable, which could have a material adverse effect on our financial position.
Our ability to meet our debt service obligations depends upon our future performance, which is subject to
general economic conditions, industry cycles and financial, business and other factors affecting our operations,
many of which are beyond our control. A portion of our cash flow from operations is needed to pay the principal
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