Entergy 2010 Annual Report Download - page 41

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ENTERGY CORPORATION AND SUBSIDIARIES 2010
Management’s Financial Discussion and Analysis continued
SUMMARY OF CONTRACTUAL OBLIGATIONS OF
CONSOLIDATED ENTITIES (IN MILLIONS):
2012- 2014- After
Contractual Obligations 2011 2013 2015 2015 Total
Long-term debt(1) $ 830 $3,659 $2,027 $11,159 $17,675
Capital lease payments(2) $ 6 $ 13 $ 9 $ 44 $ 72
Operating leases(2) $ 88 $ 146 $ 124 $ 188 $ 546
Purchase obligations(3) $1,772 $3,114 $2,663 $ 5,061 $12,610
˜
(1) Includes estimated interest payments. Long-term debt is discussed in
Note 5 to the financial statements.
(2) Lease obligations are discussed in Note 10 to the financial statements.
(3) Purchase obligations represent the minimum purchase obligation or
cancellation charge for contractual obligations to purchase goods or
services. Almost all of the total are fuel and purchased power obligations.
In addition to the contractual obligations, Entergy currently
expects to contribute approximately $368.8 million to its pen-
sion plans and approximately $78 million to other postretirement
plans in 2011; although the required pension contributions will
not be known with more certainty until the January 1, 2011 valu-
ations are completed by April 1, 2011.
Also in addition to the contractual obligations, Entergy has
$805 million of unrecognized tax benefits and interest net of
unused tax attributes for which the timing of payments beyond
12 months cannot be reasonably estimated due to uncertainties
in the timing of effective settlement of tax positions. See Note 3
to the financial statements for additional information regarding
unrecognized tax benefits.
CAPITAL FUNDS AGREEMENT
Pursuant to an agreement with certain creditors, Entergy
Corporation has agreed to supply System Energy with sufficient
capital to:
n    maintain System Energy’s equity capital at a minimum of 35%
of its total capitalization (excluding short-term debt);
n    permit the continued commercial operation of Grand Gulf;
n    pay in full all System Energy indebtedness for borrowed
money when due; and
n    enable System Energy to make payments on specific System
Energy debt, under supplements to the agreement assigning
System Energy’s rights in the agreement as security for the
specific debt.
Capital Expenditure Plans and Other Uses of Capital
Following are the amounts of Entergy’s planned construction and
other capital investments by operating segment for 2011 through
2013 (in millions):
Planned construction and capital investments 2011 2012 2013
Maintenance Capital:
Utility:
Generation $ 126 $ 135 $ 123
Transmission 193 209 207
Distribution 440 451 448
Other 89 100 90
Total 848 895 868
Entergy Wholesale Commodities 93 93 111
Total $ 941 $ 988 $ 979
Capital Commitments:
Utility:
Generation $ 1,098 $ 1,071 $ 628
Transmission 213 252 223
Distribution 30 26 14
Other 44 46 57
Total 1,385 1,395 922
Entergy Wholesale Commodities 273 268 264
Total $ 1,658 $ 1,663 $ 1,186
Total $2,599 $2,651 $2,165
Maintenance Capital refers to amounts Entergy plans to
spend on routine capital projects that are necessary to support
reliability of its service, equipment, or systems and to support
normal customer growth.
Capital Commitments refers to non-routine capital investments
for which Entergy is either contractually obligated, has Board
approval, or otherwise expects to make to satisfy regulatory or
legal requirements. Amounts reflected in this category include
the following:
n    The currently planned construction or purchase of additional
generation supply sources within the Utility’s service
territory through the Utility’s portfolio transformation
strategy, including Entergy Louisiana’s planned purchase of
Acadia Unit 2, which is discussed below, and three resources
identified in the Summer 2009 Request for Proposal, including
a self-build option at Entergy Louisiana’s Ninemile site.
n    Entergy Louisiana’s Waterford 3 steam generators replace-
ment project, which is discussed in further detail below.
n    System Energy’s planned approximate 178 MW uprate of the
Grand Gulf nuclear plant. The project is currently expected
to cost $575 million, including transmission upgrades. On
November 30, 2009, the MPSC issued a Certificate of Public
Convenience and Necessity for implementation of the uprate.
n    Transmission improvements and upgrades designed to
provide greater transmission flexibility in the Entergy System.
n    Spending to comply with current and anticipated North
American Electric Reliability Corporation transmission
planning requirements.
n    Entergy Wholesale Commodities investments is associated
with specific investments such as dry cask storage, nuclear
license renewal efforts, component replacement across the
fleet, NYPA value sharing, wedgewire screens at Indian Point,
and spending in response to the Indian Point Independent
Safety Evaluation.
39