Page 77 - AIF - English

which we are able to borrow funds for our capital required and/or the company’s access to capital could be

programs. The continued uncertainty in the global restricted or only be available on unfavourable terms, all of
economic situation means that the company, along with all which could have a material adverse effect on Suncor’s

other oil and gas entities, may continue to face restricted business, financial condition, results of operations and
access to capital and increased borrowing costs. To the cash flow.

extent that external sources of capital become limited or Suncor’s debt instruments are rated by various credit rating
unavailable or available on unfavourable terms, our ability
agencies. These ratings affect Suncor’s ability to gain access
to make capital investments and maintain existing to reasonably priced debt financing. If any of Suncor’s
properties may be constrained, and, as a result, Suncor’s credit rating agencies downgrade Suncor’s debt

business, financial condition, results of operations and cash instruments, it may restrict Suncor’s ability to issue debt
flow may be materially adversely affected.
and may also increase the cost of borrowing, including

We believe that we have sufficient funds available to fund under existing credit facilities.
our planned capital expenditures for 2014. If cash flow
Rating agencies regularly evaluate the company and our
from operations is lower than expected, if capital subsidiaries. Their ratings of our long-term and short-term
expenditures in 2014 exceed current estimates, or if we
debt are based on a number of factors, including our
incur major unanticipated expenses related to the financial strength, as well as factors not entirely within our
development or maintenance of our existing assets, Suncor
control, including conditions affecting the oil and gas
may need to re-evaluate its capital program or seek industry generally, and the wider state of the economy. We
additional capital. Choosing not to obtain the financing
cannot be assured that one or more of our credit ratings
necessary for our capital expenditure plans may result in a will not be downgraded. Our borrowing costs and ability to
delay in the planned development of production from our
raise funds are directly impacted by our credit ratings. In
operations and strand significant capital, while increasing addition, credit ratings may be important to customers or
costs to keep projects in safe mode. Choosing to seek
counterparties when we compete in certain markets and
additional capital might adversely affect our credit ratings. when we seek to engage in certain transactions, including
Either of these events could have a material adverse effect
transactions involving over-the-counter derivatives.
on Suncor’s business, financial condition, results of
operations and cash flow.
A credit-rating downgrade could potentially limit our access
to private and public credit markets and increase the costs
of borrowing under existing facilities. A reduction in our
Issuance of Debt and Debt Covenants
credit ratings also could have a significant impact on
From time-to-time, we may finance capital expenditures in certain trading revenues, particularly in those businesses
whole or in part with debt, which may increase our debt
where counterparty creditworthiness is critical. It could
levels above industry standards for oil and gas companies trigger collateralization requirements related to physical and
of similar size. Depending on future development plans, we
financial derivative liabilities with certain marketing
may require additional debt financing that may not be counterparties and facility construction contracts. The
available or, if available, may not be available on favourable
occurrence of any of the foregoing could adversely affect
terms, including higher interest rates and fees. Neither the our ability to execute portions of our business strategy and
Articles of Suncor (the Articles) nor its bylaws limit the
amount of indebtedness that we may incur; however, we could have a material adverse effect on our liquidity and
capital position.
are subject to covenants in our existing bank facilities and
seek to avoid an unfavourable cost of debt. The level of
Dividends
our indebtedness, from time-to-time, could impair our
ability to obtain additional financing on a timely basis to Our payment of future dividends on our common shares
will be dependent on, among other things, our financial
take advantage of business opportunities that may arise
and could negatively affect our credit ratings, which could condition, results of operations, cash flow, the need for
funds to finance ongoing operations, debt covenants and
have a material adverse effect on Suncor’s business,
financial condition, results of operations and cash flow.
other business considerations as the company’s Board
considers relevant. There can be no assurance that we will
We are required to comply with financial and operating
continue to pay dividends in the future, at current levels, or
covenants under these credit facilities and debt securities. at all.
We routinely review the covenants based on actual and

forecast results and have the ability to make changes to Competition
our development plans, capital structure and/or dividend
The global petroleum industry is highly competitive in many
policy to comply with covenants under the credit facilities. aspects, including the exploration for and the development
If Suncor does not comply with the covenants under its of new sources of supply, the acquisition of crude oil and

credit facilities and debt securities, repayment could be
natural gas interests, and the refining, distribution and

SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2014 75