Commitments

12 Months Ended

Dec. 31, 2012

13. COMMITMENTS

LEASES—The Company and its subsidiaries enter into long-term non-cancelable lease arrangements which, for accounting purposes, are classified as either operating lease or capital lease. Operating leases primarily include certain transmission lines, office rental and site leases. Operating lease rental expense for the years ended December 31, 2012, 2011 and 2010 was $58 million, $63 million and $56 million, respectively. Capital leases primarily include transmission lines at our subsidiaries in Brazil, vehicles, and office and other operating equipment. Capital leases are recognized in Property, Plant and Equipment within “Electric generation and distribution assets.” The gross value of the capital lease assets as of December 31, 2012 and 2011 was $94 million and $95 million, respectively. The table below sets forth the future minimum lease payments under operating and capital leases together with the present value of the net minimum lease payments under capital leases as of December 31, 2012 for 2013 through 2017 and thereafter:

		Future Commitments for
December 31,		Capital Leases		Operating Leases
		(in millions)
2013	.	$	12	$	53
2014	.		12		51
2015	.		11		48
2016	.		11		47
2017	.		11		47
Thereafter			160		517
Total			217	$	763
Less: Imputed interest			138
Present value of total minimum lease payments		$	79

CONTRACTS—The Company's operating subsidiaries enter into long-term contracts for construction projects, maintenance and service, transmission of electricity, operations services and purchase of electricity and fuel. In general, these contracts are subject to variable quantities or prices and are terminable in limited circumstances only. Electricity purchase contracts primarily include energy auction agreements at our Brazil subsidiaries with extended terms from 2013 through 2028. The table below sets forth the future minimum commitments under these contracts as of December 31, 2012 for 2013 through 2017 and thereafter. Actual purchases under these contracts for the years ended December 31, 2012, 2011 and 2010 are also presented:

		Electricity Purchase Contracts		Fuel Purchase Contracts		Other Purchase Contracts
Actual purchases during the year ended December 31,		(in millions)

2010	.	$	2,422	$	1,686	$	1,652
2011	.		2,463		1,577		1,767
2012	.		2,819		1,860		1,701


Future commitments for the year ending December 31,
2013	.	$	2,599	$	1,555	$	1,976
2014	.		3,008		998		1,743
2015	.		2,952		555		1,629
2016	.		2,971		428		1,202
2017	.		2,351		416		1,093
Thereafter			25,001		4,618		11,153
Total		$	38,882	$	8,570	$	18,796

- Definition

The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.

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